Banking
From The Report: South Africa 2016
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While South Africa’s banking sector already ranks as one of the best regulated and well capitalised in the region, regulatory changes are set to bring further improvements to the industry’s soundness and stability, as well as the treatment of its customers. The sector does, however, continue to face headwinds. As expansion of the broader economy has slowed, loan growth for banks has also eased. High levels of consumer credit, ratings downgrades and the closure of a local bank have also raised concerns. Nonetheless, growth amongst South African banks is expected to accelerate in the medium term. The sector is also set to benefit from ongoing investment in compliance and regional expansion over the long run, though the industry’s pivot to Africa is also likely to shift risk profiles.

This chapter contains interviews with Lesetja Kganyago, Governor, South African Reserve Bank; and Mike Brown, CEO, Nedbank.

Articles from this Chapter

Overview

A time of adjustment: New rules and guidelines will mean a stronger, more stable sector in the long term
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The South African banking sector is well regulated and capitalised, as well as efficiently run. Its institutions are not only the top in the region by many measures, but rank highly globally and are potentially competitive in the developed world. Regulatory changes are set to further improve banking in South Africa in terms of soundness, stability and the treatment of customers. The sector is, however, facing a number of challenges. Economic growth in the country has slowed, which has in turn resulted…

Interview

Banking on policy: OBG talks to Lesetja Kganyago, Governor, South African Reserve Bank
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Interview:Lesetja Kganyago To what extent are inflationary pressures driven by exogenous rather than domestic factors? LESETJA KGANYAGO: A combination of external and internal factors impact inflation in South Africa, which influences monetary policy decisions. In 2015 the Monetary Policy Committee (MPC) meetings consistently highlighted that risks to the inflationary outlook would come from the exchange rate, which will largely be driven by the impending rise of US interest rates. We expect…

Analysis

The final 20%: Reaching the unbanked population is a complex task
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Given South Africa’s history and economy, financial inclusion is a serious issue for the country. It is committed to making up for the disparities of the apartheid era and it wants and needs to improve the lives of its poorer citizens, as much for the economy as for the sake of the people themselves. As such, the country has worked for more than a decade to get more South Africans banked and serviced by financial institutions, with various programmes and policies implemented and no shortage of…

Interview

A balanced approach: OBG talks to Mike Brown, CEO, Nedbank
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Interview: Mike Brown What impact will rising interest rates have on the South African banking sector? MIKE BROWN: For a long period of time the South African banking system and the “big four” banks in particular have been remarkably resilient, generating earnings growth in good times and bad times. The challenge now is how to continue to grow earnings in a slower growth domestic environment and in a rising interest rate cycle. Fortunately the rest of the region is growing so banks will…